Ethereum fees have fallen below $5 per simple transaction according to pictured data by Santiment, a blockchain analytics firm.
That’s down from circa $35 in November and May last year when ethereum’s price neared $5,000.
It has fallen by circa 50% since, while fees have fallen 7x instead with more complex transactions, like Uni swaps, also down to $40 from highs of as much as $200.
Ethereum transactions have also fallen from the high of 1.7 million a day in May, to now 1.17 million transactions a day.
Some of this reduction in fees and transactions may be due to an increase in usage for second layers, L2s.
Arbitrum in particular is kind of taking off with $3 billion in assets on the optimistic rollup second layer.
A whole ecosystem now resides on it, with things like 1inch, Aave, Balancer, Curve, MakerDAO, Sushi, and pretty much almost everything you might need to defi.
Some ethereans even claim they no longer use the base layer as things like Arbitrum provide all they need with far lower fees.
More than 2 million eth now reside on second layers, up from 150,000 in August, a 10x increase in just months.
That amounts to 1.7% of ethereum’s total supply, but of course much of eth’s supply is on cold storage or exchanges where it doesn’t interact much with the blockchain.
A better comparison might thus be with defi assets of 8.5 million eth, for which it amounts to 24%.
Thats a sufficient number to potentially start making a dent on network traffic, and that’s before zk based Ethereum Virtual Machines (EVMs) even launch.
Starknet is already out there, but there is no bridge yet, while zkSync has not yet launched a zk-EVM.
Thus second layers are not being utilized anywhere near their full potential yet, but with $5 billion in assets already on such second layers, it may well be that the low fees era is here to stay at least for some defi players.